Financial and Banking News
Card fraud in the UK falls by 23%The amount of money being lost through card fraud fell by 23% in the first half of the year in the UK, as criminals changed their strategies and prevention measures began to take effect, according to figures published today.
The total cost of fraud on credit cards and debit cards fell to £232.8m from January to June, down from £304.2m in the first half of last year, Financial Fraud Action UK (FFAUK) said today.
The cost of counterfeit card crime, where cards are skimmed or cloned, fell by the largest margin from £88.8m last year to £46.3m, which is also below the 2006 level of £52.8m. Internet, phone and mail order crime, known as card-not-present fraud, fell by 18% from £163.9m last year to £134m.
Rumina Hassam, personal finance expert at uSwitch.com, said: "Consumers should do everything they can to protect themselves. One of the easy ways to reduce the risk of fraud is to limit the number of active accounts you have."
"Our research has shown that 16.3 million consumers are holding on to 38m dormant credit cards with a total limit of £200bn, just in case they hit hard times. The two issues may seem unrelated but as many of these accounts could be registered at an old address, these cards are easy pickings for fraudsters."
FFAUK said it was possible that fraudsters were now focussing their efforts on online banking scams and cards issued overseas. Head of fraud control, Katy Worobec, said: "These latest fraud figures are good news, but we know there's no room for complacency."
She added: "Reasons behind this decrease include the increasing use of sophisticated fraud screening detection tools by retailers and banks, as well as the continuing growth in the use of MasterCard SecureCode and Verified by Visa [online payment systems that make cards more secure when shopping online] by both online retailers and cardholders."
The cost of fraud committed on UK cards used abroad dropped by 45% over the same period, while fraud in the UK fell by 9%. However, there was an increase in the level of fraud on overseas cards used in the UK.
Worobec said: "Although it is difficult to prove, we think that one of the reasons for this dip in card losses may simply be as a result of fraudsters realising that they can prosper more by targeting foreign issued cards, particularly those without chip and pin protection and which currently have stronger currencies than sterling."
"The fact that we have seen a 36% increase in the first half of this year in the amount of fraud being committed on foreign issued cards here in the UK adds some weight to this theory."
While the cost of most types of fraud on UK cards decreased, two types of financial crime saw significant increases. Card ID theft, in which a criminal falsely applies for a card under someone else's name or intercepts an existing account and sets up a card at a new address, increased by 23%.
But it was online banking, in the form of phishing emails which ask recipients to enter their security details into bogus bank websites and malicious software which infiltrates home computers, that saw the largest increase, soaring by 55%.
A spokeswoman for FFAUK said this form of fraud targeted consumers directly and was often avoidable.
She said people should make sure they had up-to-date anti-virus software and adequate firewalls on home computers, and should "be as cautious with emails as you would be with a knock at the door", and never give security details away in response to an email.
Date: 08.10.2009 
Get your content published on BanksDAILY.com in just a few clicks.